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Check Before You Invest : Gennex Laboratories Ltd

BSE: 531739 NSE: ISIN: INE509C01026
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Gennex Laboratories Ltd belong to?
Gennex Laboratories Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Gennex Laboratories Ltd a good quality company?
Gennex Laboratories Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Gennex Laboratories Ltd undervalued or overvalued?
Gennex Laboratories Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 18.33 25.86
Price to Book 1.25 2.08
Price to Sales 2.52 2.39
EV to EBITDA 11.81 15.67
Q.4 Is Gennex Laboratories Ltd a good buy now?
Gennex Laboratories Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Gennex Laboratories Ltd?
Gennex Laboratories Ltd revenue growth is 41.6% for FY-2025, which is above its 5-year CAGR of 11.2%, indicating faster growth.

Q.2 Gross Profit margin of Gennex Laboratories Ltd?
Gennex Laboratories Ltd Gross profit margin which is the profit after deduction of direct costs, is 17.1% for FY-2025, which is above its 5-year median of 9.9%, indicating increasing margins.

Q.3 Operating Profit Margin of Gennex Laboratories Ltd?
Gennex Laboratories Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 10.94% for FY-2025, which is in line with its 5-year median of 10.94% indicating stable margins.

Q.4 Net Profit Margin of Gennex Laboratories Ltd?
Gennex Laboratories Ltd Net Profit Margin is 14.84% for FY-2025, is above its 5-year median of 7%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 17.1 9.9
Operating Profit Margin (%) 10.94 10.94
Net Profit Margin (%) 14.84 7

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Gennex Laboratories Ltd?
Gennex Laboratories Ltd Return on Asset is 6.63%, which is in line with its 5-year historical median of 6.63%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Gennex Laboratories Ltd?
Gennex Laboratories Ltd Return on capital employed is 10.25% for FY-2025, which is below its 5-year historical median of 11.78%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Gennex Laboratories Ltd?
Gennex Laboratories Ltd Return on equity is 8.16% for FY-2025, which is below its 5-year historical median of 9.35%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Gennex Laboratories Ltd?
Gennex Laboratories Ltd Cash conversion cycle is 59 days, in line with its 5-year historical median of 59 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.5 0.87
ROE (%) 8.16 9.35
ROCE (%) 10.25 11.78
Cash Conversion Cycle 59 days 59 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Gennex Laboratories Ltd?
Gennex Laboratories Ltd Debt-to-Equity ratio is 0.03, which is lower the industry average of 0.14, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Gennex Laboratories Ltd?
Gennex Laboratories Ltd Debt to cash flow from operations is -0.6, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Gennex Laboratories Ltd?

Q.1 Promoter shareholding and pledge status of Gennex Laboratories Ltd?
Promoters hold 23.63% of the Gennex Laboratories Ltd, with 17.42% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Gennex Laboratories Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Gennex Laboratories Ltd vs industry peers?
Gennex Laboratories Ltd revenue CAGR is 11.20%, compared to the industry median CAGR of 5.35%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 41.6 5.4
Gross Profit Growth (%) 12.5 14
Operating Profit Growth (%) -16.7 11.5
Net Profit Growth (%) 16.7 12
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.5 0.79
ROE (%) 8.16 9.17
ROCE (%) 10.25 11.52
Cash Conversion Cycle (days) 58.77 76

Valuation & price assessment

Q.1 Stock return of Gennex Laboratories Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 6.6% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
6.6% 14.9% 22.5% -6.2%
Q.2 Valuation ratios of Gennex Laboratories Ltd vs historical?
The current P/E ratio of 18.33 is lower than its historical median of 25.86, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 18.33 25.86 31.09
Price to Book 1.25 2.08 2.85
Price to Sales 2.52 2.39 2.82
EV to EBITDA 11.81 15.67 15.99

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